TVA tax bill sent to Riley

MONTGOMERY -- A bill that would allow North Alabama counties to keep all the money paid by TVA in lieu of taxes won final passage in the Alabama Legislature Tuesday, but not before a scare in the House.

The bill now goes to Gov. Bob Riley, who is expected to veto it for the second straight year.

However, Riley will be unable to employ the tactic he used in 2009 by letting it die without his signature because there's too much time left in the session.

Even though the bill fell one vote short in the House of the simple majority needed to override a gubernatorial veto, its sponsor, Rep. Jeff McLaughlin, D-Guntersville, said he'll have the necessary votes when Riley's veto returns.

"We'll get that," he said. "We won't be asleep at the switch on that."

Rep. Mac McCutcheon, R-Capshaw, chairman of the Madison County delegation, also predicted an override, adding, "A lot of Democrats will vote an override on the governor no matter what the issue is."

McLaughlin's bill would repeal a 1978 law that allows 5 percent of the money paid by the Tennessee Valley Authority to be distributed to "dry" counties and cities that ban the sale of alcoholic beverages that are not served by TVA.

Earlier in the session, the House had approved the bill on a 72-7 vote, but when it was returned Tuesday with a Senate amendment that would take another $200,000 from the General Fund budget some House members balked.

The original bill would take about $6 million, but the money would be made up through growth in state liquor sales.

Some House members said they were concerned about the bill tapping the General Fund, which has already been hard hit by the recession.

"This bill is not going to be the straw that broke the camel's back," said McLaughlin. "The camel is already in traction, and has been for years."

McLaughlin turned back two attempts to have a vote on the bill delayed.

It took assurances from the chairman of the House Government Appropriations Committee, Rep. John Knight, D-Montgomery, before the House finally accepted the Senate bill on a 52-26-3 vote, and sent it to Riley.

It was approved earlier Tuesday in the Senate on a 17-7-1 vote.

During the Senate debate, Sen. Bobby Denton, D-Muscle Shoals, explained that in 1930, 100 percent of TVA funds went to the state's General Fund budget.

A legislative deal brokered by Gov. George C. Wallace in 1978 began a schedule that slowly transferred most of the funds back to TVA counties, he said.

"Fifty years ago, 100 percent of all of that money generated in the northern 16 counties came to the General Fund, which was very unfair," said Sen. Lowell Barron, D-Fyffe. "The local cities and the local counties got not one penny of it of property tax money from the (TVA)."

The Senate also gave final approval to a proposed constitutional amendment that would prohibit occupational taxes in Madison County. That amendment will be on November's ballot.